Spain is now paying the price of an idiotic rush to install billions of dollars worth of subsidised solar power plants without counting the economic cost. With the injection of financial reality caused by Greece's near-death experience Spain is trying to get it's books in order and reverse some of the foolish Green power decisions it has made.
Bloomberg reports Spain’s government will cut the revenue of most existing solar-power plants by 30 percent, a move that may bankrupt hundreds of companies that produce electricity using photovoltaic panels, a local trade group said.
The industry ministry, after negotiating with trade groups for weeks, plans to reduce the number of hours a day during which they may earn subsidized prices for clean energy, said Tomas Diaz, director of external relations at the Photovoltaic Industry Association in Madrid.
“It’s incomprehensible that the government is doing this,” Diaz said in a telephone interview after solar industry representatives met today with Deputy Industry Minister Pedro Marin. “We feel cheated.”
Solar executives, whose companies have invested more than 18 billion euros ($22 billion) in the last three years in Spain, have pressed the government for weeks to maintain prices guaranteed for 25 years under a 2007 law. The decision, which hasn’t been approved by the cabinet, would mean bankruptcy for most of Spain’s 600 photovoltaic operators, Diaz said.
A spokesman for the industry ministry who asked not to be identified by name declined to comment. The ministry has yet to make public its proposed reductions.
“The companies will challenge this in the courts,” Diaz said.
New Plants Targeted
Spain also plans reductions for solar-energy facilities yet to be built. Subsidized rates earned by new, ground-based photovoltaic generators will be reduced by 45 percent, Diaz said. Panels mounted on large roofs will see a 25 percent reduction, while those on small roofs will be cut by 5 percent, he said. Diaz did not comment on rates for solar-thermal plants, a rival technology for producing power from the sun.
“This is ridiculous,” said Pedro Michelena, a partner at Qualitas Equity Partners, which owns a third of Fotowatio Renewable Futures alongside GE Capital. “I can’t believe that this is the final proposal.”
“We have to hope that common sense wins out in the end,” said Michelena. “I feel it’s still up in the air.”
The failure of the Spanish solar experiment is an object lesson to misguided politicians seeking to gain green credentials by subsidising un-economic green power , with such subsidies to be paid by taxpayers long into the future . In the end the piper must be paid and these lawmakers will be seen for the fools they are.
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